Tag Archives: August 2008

Most Arizona employers associate the Family Medical Leave Act (FMLA) with employee time off to care for an ailing parent or spouse or to tend to a newborn baby or newly adopted child.

Since early this year, the list of reasons for granting extended employee leaves has become longer, and in some cases, so has the permitted time off.

As of Jan. 28, when President Bush signed the National Defense Authorization Act of 2008 into law, the FMLA extends coverage to employees who are caring for a spouse, child, parent or “next of kin” injured while on active military duty. It also covers unpaid leave “for any qualifying exigency” arising from a spouse, a child or parent of the eligible employee being on active duty (or being notified of an impending call or order to active duty) in the armed forces.

It is well documented that military members who are injured in battle are surviving in record numbers, leaving active duty and requiring short- and long-term care to convalesce. This law recognizes this new fact of life for military families.

Companies with 50 or more employees must now grant up to six months of leave in a 12-month period to an eligible employee who is caring for a wounded service member, and 12-weeks leave to an employee helping a relative with a pressing need related to getting his or her affairs in order in preparation for military service.

The two provisions for military families represent the first expansion of the FMLA in the nearly 15 years since it was enacted. The expansion is expected to have significant impact on companies covered by the FMLA as long as overseas deployment of troops — and resulting casualties — continues.

The law is causing confusion in the business world, especially with regard to the definition of an “exigency.” We believe the intent behind this provision is to offer assistance to families who must now prepare for, and deal with, the service member’s deployment. That could include time off for an employee helping to arrange for childcare, attending pre-deployment briefings, handling legal, economic or financial-planning issues, paying bills, or providing emotional support.

Another area of confusion surrounds certification. What information can an employer properly require, for example, regarding the service member’s active duty status and the employee’s “next of kin” status?

The U.S. Department of Labor has promised to issue regulations to clarify the confusion, but they are not expected before this fall. Until then, employers are required to provide leave to employees caring for wounded relatives and are not required but are being encouraged to provide leave for qualifying exigencies.

We advise employers to amend their FMLA policies and practices immediately to reflect these significant changes in the qualifying reasons and duration of protected leave. In addition, as we await final DOL regulations, employers must proceed with caution in addressing an employee’s request for military-related leave.

Employers with questions about employee-leave rights should consider contacting experienced employment law counsel.

Mark Ogden is the managing shareholder of the Phoenix office of Littler Mendelson, the nation’s largest employment and labor law firm representing management. He can be reached at 602-474-3600 or jmogden@littler.com

Bruce Pearson took over the CEO role at John C. Lincoln North Mountain Hospital in Phoenix in April. AB met with him to find out more about his goals for the hospital, as well as his insight on various issues the health care industry is facing.

What is your background in the health care industry? I grew up in the Northwest and I had a Master’s in Business Administration, and I had a desire to get into hospital management. I moved to Arizona to go back to school at Arizona State University — they have a master’s program in health services administration. So I came here for an MHA degree and I went to work for a local health care organization and I just loved it here. So we moved here 26 years ago, and I’ve had the opportunity to work at several facilities/hospitals around different parts of the Valley — the central Valley, the West Valley, the East Valley — and now it’s my opportunity to work in the North Valley.

What prompted your move? John C. Lincoln has an excellent reputation for clinical care as being a place that people want to work for, and one of its designations is as a magnet hospital for nursing. It was actually the first hospital in the state of Arizona to become a magnet hospital … What that means is they met the criteria that had been established at a national level to receive a designation as a hospital that truly is a magnet to attract and retain professional nurses. … Also, the organization is truly unique among hospital organizations in its level of commitment to the local community here. We not only provide hospital and health care services, but John C. Lincoln also has demonstrated a tremendous commitment to other community-oriented services through our Desert Mission, which was actually started over 80 years ago in the area. We have a food bank, we have the Lincoln Learning Center (a nationally accredited child-care facility), a community health center, a children’s dental clinic … providing free dental care, the Marley House (a family resource center that helps stabilize families in crisis) and a neighborhood renewal program.

What are your goals for the hospital? It’s already a great organization, but my goal as the CEO is to work with the team of people who are here to continue to make improvements in the quality of care that we deliver, in our technologies (continue tobring in the latest technology and applying it), working with the physicianswho are here and with new physicians who come in and bring new skills, and to continue to make this agreat place for patients toreceive care, for staff to work and for physicians to practice medicine.

What is the greatest dilemma facing hospitals in Arizona? One of the challenges nationally for hospitals is a shortage of health care professionals, and nursing would be a great example of that. The John C. Lincoln organization has a very successful nursing program in partnership with Grand Canyon University and we work with them and other universities and colleges to help train nurses. It is a problem, but John C. Lincoln is also part of the solution.

Despite the sluggish economy, restaurants continue to open or expand in the Valley, and Arizona native Kona Grill is no exception. Originally founded in Scottsdale in 1998, the restaurant has expanded throughout the United States, with locations in Missouri, Nevada, Indiana, Colorado, Connecticut, Michigan, Louisiana, Illinois, Nebraska, Texas and Florida. In June, it came back to its roots with the opening of a new location in Gilbert, and there are more plans for growth on the horizon. The Gilbert location joins two other Kona Grills in the Valley at Scottsdale Fashion Square and Chandler Fashion Center.

The new Gilbert restaurant opened at SanTan Village, one of many recent outdoor lifestyle malls built in the Valley. Kona Grill’s interior includes many of its signature features, including soft lighting, a granite sushi bar and a 2,000-gallon saltwater aquarium filled with exotic fish.

Like its decor, Kona Grill’s menu is an inspired combination of American comfort food and Pacific Rim ingredients.

The appetizers exemplify this philosophy with onion rings served with a pineapple chipotle and spicy mustard sauce; blackened catfish or macadamia nut chicken tacos; calamari with a spicy aioli dipping sauce; and Kahuna Bites, beef sliders seasoned with onions and thyme. I was disappointed to see that one of my favorite Kona Grill appetizers is no longer on the menu, a spicy salmon sashimi paired with sour cream and avocado and wrapped in a flour tortilla that is then flash-fried. Here’s hoping Kona Grill brings that delight back.

The dinner menu abounds with baby back ribs, pizzas, macadamia nut chicken, lemon grass crusted halibut and sweet chili-glazed salmon. The pizza toppings run the gamut of exotic from regular pepperoni to shitake mushrooms and goat cheese. The macadamia nut chicken might sound simple, but it features a shoyu cream sauce and a pineapple-papaya marmalade.

A special treat is the Big Island Meatloaf. If you’re expecting it to be just like Mom used to make, you’ll be in for a surprise — unless Mom hails from Hawaii. The meatloaf is made with sweet Italian and Andouille sausage with a mushroom ragu. The dish is topped off with white cheddar mashed potatoes and wok-tossed vegetables.

If you’re in the mood for steak, Kona Grill provides with 6 and 10-ounce filets, and a 20-ounce, bone-in rib-eye.

Now for me, the real attraction to Kona Grill is the sushi. I love sushi, but I realize not everyone shares my enthusiasm, so with its full-complement of non-sushi dishes, friends and I can go to Kona Grill and both be happy.

The basic rolls and sashimi are handled well at Kona Grill, but it’s the restaurant’s specialty sushi dishes that are a real delight.

Called Kona Rolls, my favorites are the spider roll, deep fried soft-shell crab with crab mix, avocado and cucumber wrapped in seaweed and soy paper, and topped with a sweet eel sauce; and the Sunshine Roll, spicy salmon with cucumbers wrapped with rice and seaweed, and topped with fresh salmon and thinlysliced lemon. Of the chef’s specials, I’m a fan of the Volcano, a dish made of baked crab, white fish and yamagobo (pickled burdock plant) and topped with motoyaki sauce, sriracha and eel sauce.

The Asian-fusion philosophy doesn’t extend to the dessert menu. The goodies there are strictlyall-American with fudge brownies, apple crisps, banana pudding and even a root beer float. The one exception is the crème brûlée, in which the traditional custard is infused with fresh passion fruit.

About the only person who would disagree about calling the late John F. Long the father of the West Valley would be John F. Long. For more than 60 years, the man described by friends and colleagues as quiet and unassuming, held the vision that transformed the West Valley from fields to thousands of homes for soldiers returning from World War II to emerging cities.

The legacy of John F. Long will live forever,” says Jack Lunsford, president and CEO of WESTMARC. “Unlike footprints in the beach sand, which are eventually washed away, John’s are cast in concrete. And that doesn’t just mean buildings. He left us foresight and philanthropy, all with humility and without fanfare, simply because he loved the area, he loved people, and he wanted to make the West Valley a great place for families to live.”

Long died in February at the age of 87, but his legacy in the West Valley — indeed the entire Valley — will live on, not just in the communities he built, but also in the people whose lives he touched.

“His vision and reality of building a master-planned community is certainly important,” says his son, Jacob Long, who is chief operating officer for the company his father founded, John F. Long Properties. “Not only was he providing an affordable place to live for so many, he was also providing jobs for so many people. A lot of those people not only stayed here, but they are an integral part of helping the West Valley grow as business and community leaders. At least once a week I meet someone who says, ‘Because of your father, my family or I was able to buy a solid home at a great price. It helped me build equity.’ ”

A Phoenix native, John Long got his start in the building industry with a G.I. loan, his own hammer and other tools he borrowed from his stepfather. He first set out to build a home for his new wife, Mary. Instead, he ended up selling the home for twice what it cost to build.

By 1954, John Long was thinking big. He set out not only to build a collection of tract homes in one area, but also to create a community with schools, churches, hospitals, shopping centers and parks. Long created the state’s first master-planned community and named it Maryvale, after his wife.

By applying mass production techniques to homebuilding, Long was able to offer a three-bedroom, two-bath house with a swimming pool for less than $10,000. Houses began selling at a rate of 100 per week, and John F. Long Properties was born.

Despite his success, Long never forgot who he was building the homes for, says Diane McCarthy, director of business partnerships and legislative affairs for West-MEC. For example, when Long first began constructing homes, he realized the VA loans didn’t cover such essentials as refrigerators and stoves. So Long trekked to Washington, D.C., and went before Congress to change the scope of the VA loans.

“He didn’t do it to make money. Making money was a sidebar to what he was doing,” McCarthy says. “He wanted to build communities. He knew with all those returning servicemen after World War II who had served out here either at Williams or Luke, he knew they were going to come West and he wanted an affordable place for them to live.”

Already hailed as an innovator for his assembly line methods of homebuilding, Long adopted sustainable methods years before it became popular. In 1988, John F. Long Homes was chosen by the U.S. Department of Energy to develop, construct and test a demonstration model home featuring roof-mounted photovoltaic solar cells. His Solar One became the world’s first solar subdivision. The 24-home subdivision in Glendale has almost all of its power needs met by ground-mounted photovoltaic cells.

“I think John was probably one of the greatest entrepreneurs and innovators, at least in the housing end, in water conservation, in just general development,” says Rep. John Nelson, (R-Phoenix). “He was a step ahead of everybody in those areas.”

For Long, finding new ways to build homes was just one part of his vision. He was interested in building a community; more specifically, he wanted the West Valley to be a place where people lived and worked. Rather than resent the fact that the West Valley was perpetually in the East Valley’s shadow, Long took the East Valley model and used it to reshape the West Valley. To that end, WESTMARC was born

“WESTMARC wouldn’t have happened without him. It’s just that simple,” says McCarthy, who first met Long in 1992, when she became the first director of WESTMARC. “He provided a lot of the seed money for us to get started, and in addition to the money, he talked to a lot of people. When you’re starting up an organization like that, you don’t have a lot of credibility because you don’t have a track record. He was willing to talk to other people and say, ‘Look, I really believe in what this organization can do and we have to give it a chance. And we all have to be willing to roll up our sleeves and get involved and help make a lot of these things happen.’ ”

Making things happen was a John Long specialty. He was always quick to donate money, land or services to make sure his beloved West Valley would continue to grow and be a place where people could raise families and build communities. A very small portion of what he gave includes the labor and material to fill potholes on 550 miles of West Phoenix streets; building and donating 21 townhouses to the city’s Affordable Housing Program; and when the Milwaukee Brewers were looking for a new Spring Training home, donating 60 acres of land for the Maryvale Baseball Park – as well as lending the city $10 million for construction.

Besides giving out of his own pocket, Long made sure others with the wherewithal gave as well.

“Dad was born and raised in Phoenix,” Jacob Long says. “This makes a huge difference. You have that sense of ownership and pride. He always was looking for ways to help others help themselves, who in turn might have the same feelings and be inspired. That is how true communities flourish.”

John Long had a standing challenge to other developers who built in the West Valley, Nelson says.

“He’d say, ‘I’ll do this if you do that,’ ” Nelson adds. “If you took a look at the developers who took a project on the West Side, they always had that challenge with John to put a project in pace that had benefits for those who lived there.”

McCarthy recalls a time when the library and senior center just north of Indian School Road and 51st Avenue badly needed repairs. Long made sure money for the upgrades was included in a bond measure. The measure succeeded, but when he found out the renovations weren’t scheduled until years later, Long took matters into his own hands.

“He went to the city and said, ‘Here’s the check for $10 million. Get it done sooner and pay me when the bond proceeds come in,’ ” McCarthy says. “So that beautiful, beautiful library and senior center he lived to see done.”

Exactly how much Long gave to the community is not exactly known, as most of his work was done behind the scenes and with no fanfare.

“Both parents instilled in us the need to be aware of someone who truly needs help and is experiencing a tough time through no fault of their own,” Jacob Long says. “One such person, a teenager, experienced a very bad athletic accident. He was confined to a wheelchair and his parents didn’t have the resources to modify their home. Dad read about this in the newspaper and he contacted the family and offered to remodel their home to accommodate the son’s special needs. This way he could be with his family. No one asked (my Dad) to do this.”

His philanthropy was not a recent development. In fact, he established the John F. Long Foundation, a nonprofit group supporting local charities, schools, education events and general community needs, in 1959. Long was generous in the extreme, but he was still a businessman and he would fight to protect his interests and those of the community he loved.

“He had a heart of gold and was tough as nails when he had to be,” Nelson says. “John sued the living daylights out of the city of Phoenix (in 1986) because they sold water to Palo Verde (Nuclear Generating Station). That was another side of John; he was not afraid to fight. If he felt he was right, he’d drag you to court. He didn’t care who you were.”

In 2000, WESTMARC created a lifetime achievement award and named it after Long. Despite all of his years working for the West Valley, the honor came as a surprise to him, McCarthy says.

“We told him we named it after him and I had never seen him speechless up to that point,” she says. “He was so thrilled at that. And then every year, I would take a couple of names to him and ask him, ‘Who do you think should get it?’ And he’d pick out the one and say, ‘That’s the one.’

“He never, ever flaunted anything. He was the most humble person. He would walk into a room and quietly sit down and unless you knew John Long, you wouldn’t know it was him,” McCarthy says. “I miss him. He was always somebody to call if you had an idea and he was willing to call you if he had an idea. And that’s how things get done.”

Keeping with its goal of enhancing the education system in the West Valley, WESTMARC is a major proponent of West-MEC — the Western Maricopa Education Center District. West-MEC is a public school district that provides Career and Technical Education (CTE) programs to more than 21,000 high school students in the West Valley. West-MEC was formed in 2002 after eight west side communities voted to form the Western Maricopa Education Center. Today, 12 districts and 39 high schools make up the West-MEC district. Not only is WESTMARC a business partner with the school district, but also, President and CEO Jeff Lundsford is on West-MEC’s governing board.

Greg Donovan, West-MEC superintendent, says combining efforts and expenditures allows West-MEC to offer students more than any one district could offer alone.

“Some career and technical education programs require a lot of very expensive equipment,” he says. “Individual districts may not have the space, money or expertise to offer such programs, so we help fund the programs and provide the necessary equipment.”

West-MEC programs include classroom instruction, laboratory instruction and work-based learning. Some of the career and technical education programs offered include business, finance, marketing, technical and trades, and health occupations. A school district works with local business and industry to build educational links to employment and continuing educational opportunities. Business leaders such as Mike McAfee, director of education for the Arizona Automobile Dealers Association (AADA), which represents and supports all new car dealers in the state, work with the school district. They help determine employment sectors to focus on the type of programs and equipment needed for training.

McAfee helped Peoria High School become the first high school in the West Valley to earn NATEF Certification from the National Institute for Automotive Service Excellence (ASE) and offer a class that teaches brakes, steering suspension, electrical and engine performance. High school students in the West-MEC district can take the same automotive classes at Glendale Community College. Ford, GM and Chrysler provide new vehicles and equipment for the program at no cost to the college so students can train on new vehicles. Gateway Community College has the same type of partnership but with Toyota, Honda, Nissan and Kia.

“With more than 230 million cars and trucks on the road today, demand for highly skilled techs is going to continue,” McAfee says. “So when we employ students in their junior and senior years, we want them to continue their education.”

Experienced technicians typically earn between $30,000 and $60,000 annually in metropolitan areas. Incomes of more than $70,000 are not unusual for highly skilled, hard working master technicians, according to the AADA.

Stephanie Miller, a graduate of Willow Canyon High School in Surprise, wanted to explore a career in health care, so she took a two-part, CTE lab class during her senior year. When the class was over she was certified as a phlebotomist in Arizona. Miller’s certification landed her a job at Sun Health Del E. Webb Memorial Hospital, where she works as a part-time phlebotomist. She also attends Arizona State University and is taking classes to earn a degree in physical therapy.

“This is my first job and I make well over $10 an hour so I consider myself lucky,” Miller says.

Justin Rice, 19, a graduate of Centennial High School in Peoria, took automotive and medical CTE classes during his senior year. The Emergency Medical Technician (EMT) classes were held at Glendale Community College. Since Rice was in high school, he did not have to pay the $800 tuition for the EMT classes.

“If I hadn’t had this opportunity, I would still be saving to take the classes today,” he says.

Rice now works as a part-time EMT for First Responders Inc., which provides medical support during Arizona Diamondbacks and Phoenix Suns games, and for Little League games.

West-MEC opened a new cosmetology training center in July for students who attend high school in the West-MEC district. The 10,000-square-foot facility in Peoria is operated through a partnership between West-MEC and Gateway Community College’s Maricopa Skill Center. The center opened with 240 students and next year, enrollment will increase to 480 students, which is the center’s capacity. Students who complete the state-required minimum 1,600 hours of instruction will be eligible to take the state cosmetology board exam to become certified cosmetologists.

Chris Cook, West-MEC’s director of marketing and public relations, said the two-year cosmetology program costs $1,200 instead of $8,000 to $15,000 for the same program after high school.

A 2007 survey conducted by the National Accreditation Commission of Cosmetology Arts and Sciences showed that owners of Arizona salons are hoping to hire more than 6,800 individuals this year.

“Students benefit greatly from these programs,” Cook says. “It’s a stepping stone to a career or post-secondary education.”

An official letter from the state’s Lawn and Pool Use Enforcement Division says you must choose between taking out your green lawn or draining your swimming pool. You can’t have both, as the state has been severely restricting outdoor water use ever since the population of Central and Southern Arizona swelled to 10 million people around 2040.

You opt to keep the pool because urban sprawl and the heat-island effect have caused Arizona to break yet another record — the number of summer days when the temperature fails to drop below 100 degrees.

But time in the pool is getting rarer. Your daily commute from Pinal County to Phoenix is a grinding two hours. You’d like to work closer to home, but job centers and transportation routes haven’t reached your relatively new subdivision.

Welcome to the Sun Corridor, circa 2050.

With foresight, unified planning and a significant investment in the state’s infrastructure, the above scenario need not play out.

Without it, according to the author of a recent report on Arizona’s future, a part of the state risks becoming, not the next Los Angeles, but its bland sister — the San Fernando Valley.

“You’ll essentially get existing urban development patterns spread all over the place in a seamless, homogenous, urban fabric of chain stores, fast food restaurants and red stucco houses,” says Grady Gammage Jr., a principle author of “Megapolitan — Arizona’s Sun Corridor,” published by Arizona State University’s Morrison Institute for Public Policy.

The report predicts that land stretching from the middle of Yavapai County to western Cochise County to the Mexican border will someday merge into one integrated super metropolitan area — a “megapolitan” dubbed the Sun Corridor.

That doesn’t mean there will be uninterrupted development between Prescott and Tucson — there is too much Indian and federal land in the way. Instead, the corridor’s economies and commuting patterns will merge.

Imagine a series of overlapping circles emanating from Pima, Pinal and Maricopa counties. According to a measurement developed by scholars at the Metropolitan Institute at Virginia Tech, if at least 15 percent of workers from one area commute to another, those commuting patterns have merged.

Already, Pinal County sends 40 percent of its workers into other regions, most likely north to Maricopa County.

“That means Maricopa and Pinal are already merged,” Gammage says.

Some time between 2010 and 2020, Pinal is expected to send more than 15 percent of its workers south to Pima County, Gammage adds, creating an economic bridge between Phoenix and Tucson.

The U.S. Census designates these areas with cross-region commuting patterns as “combined statistical areas,” something the “Megapolitan” report says may happen by the 2020 decennial census.

The Sun Corridor will be one of 10 megapolitan areas in the United States. By 2030, it could be home to 10 million people and 4.5 million jobs, making it a potential hotbed of wealth and productivity. According to the report, the nation’s office market and high-tech clusters are in megapolitans.

However, as the Morrison Institute report asks, will Arizona be able to harness the staggering potential of such an area?

That would require a whole new level of dialogue and cooperation between the five councils of government, six counties, 57 municipalities and 300 other governmental units spanning the 30,000-square-mile area that would make up the Sun Corridor.

And the state is just at the beginning of that process, Gammage says, adding, “We’re behind the curve.”

Shannon Scutari, on the other hand, believes she sees progress every day.

As Gov. Janet Napolitano’s policy advisor for growth and infrastructure, Scutari is on the front lines of important growth initiatives, including the long-term planning exercise developed by the Urban Land Institute, AZ One – A Reality Check for Arizona, held last spring at the Phoenix Convention Center.

AZ One assembled more than 300 people from Maricopa and Pinal counties and guided them through alternative growth scenarios with the purpose of generating discussion and consensus.

“They’re talking to each other, there’s no doubt about it,” Scutari says of the disparate public and civic leaders she encounters in her job. “Some of them are actually even listening to each other.”

Scutari adds that the governor hopes to see the AZ One exercise duplicated in the Tucson and Flagstaff areas.

While her office is trying to bring several growth issues into sharp relief, Scutari says a pressing challenge is the state’s need to invest in transportation infrastructure.

That is why the Arizona Department of Transportation has begun a $7 million statewide study and is working with cities, tribal governments, land-use planners, regional transportation organizations and others to assess the state’s infrastructure.

One important feature of the Statewide Transportation Planning Framework, Scutari says, will be to connect land-use decisions with transportation infrastructure, some

thing that has never been done. The study already has outlined some of the most critical transportation needs.

Right now, the governor is backing an initiative campaign to put on the November ballot a one-cent increase in the state’s sales tax. The increase would raise $42 billion over 30 years to pay for transportation infrastructure.

The money is needed as Arizona’s roads and freeways are “only going to get worse in the next 25 years,” warns Tim James, director of research and consulting for ASU’s L. William Seidman Research Institute.

James headed a team that spent a year studying the state’s infrastructure and its ability to handle growth. The resulting report did not endorse the Napolitano-backed initiative, but it did say that without changes in funding mechanisms, the state cannot keep up with growth.

“There will be longer commutes, there will be more time spent in traffic, you’ll be traveling at lower speeds,” James says. “It’s going to be more congestion and less safe journeys. The road system is going to become unacceptably poor.”

The report, commissioned by the Arizona Investment Council, formerly known as the Arizona Utility Investors Association, concluded that accommodating growth is going to be “very, very costly” — probably $417 billion to $532 billion in the next 25 years.

In that time period:

Electricity demand will increase by about 85 percent, yet the state faces a funding gap in paying for new plants.

Just providing telecommunications services to the state’s current unserved population would cost up to $2 billion. Creating a state-of-the-art fiber network that would guarantee high quality telecommunications would cost about 10 times that.

Water delivery and treatment systems built decades ago will need to be replaced.

While it is impossible to predict exactly what the Sun Corridor will look like in 2040, planners do know generally where growth will occur.

Eric Anderson, transportation director for the Maricopa Association of Governments, says projections show most growth in Maricopa County will be in the West Valley as developable land in the east diminishes. Pinal County, where it meets the southeast corner of Maricopa County southeast of Queen Creek and the 275-acre state land parcel dubbed Superstition Vistas, will see a lot of growth as well. Finally, Anderson says, areas around Casa Grande and Maricopa will continue to expand.

According to MAG’s latest figures, there are about 1.8 million housing units already approved or entitled in various master-planned communities in Maricopa and Pinal counties.

Jay Hicks, co-chairman of the AZ One steering committee and a vice president at EDAW Inc., an architecture and environment consulting company, says people still can shape the character of future development, even in the face of all that entitled land.

Some parcels may need to be re-entitled as time passes and communities become more cognizant of the way land uses affect pollution levels and energy consumption.

Additionally, 40 to 50 percent of all commercial properties will need to be redeveloped in the next 15 to 20 years, Hick says.

Facing the challenges that come with growth seems daunting, but Scutari says there is “a sense ofoptimism” among the state’s stakeholders.

As Gammage put it: “There is an opportunity here, if we can seize it and get ahead of it, we can do something really special.”

A quick tutorial: Proxies are the means by which public shareholders vote. The Securities Exchange Act of 1934 governs the solicitation of those proxies. The act and the regulations adopted by the Securities and Exchange Commission under the act are designed to ensure a fair process with adequate disclosure to shareholders so they may make an informed voting decision in a timely manner.

In the past year, the SEC has adopted significant rules intended to simplify, clarify and modernize proxy solicitations by use of the Internet.

In July 2007, the SEC adopted amendments that modernize the proxy rules by requiring issuers and other soliciting persons to follow the “notice and access” model for proxy materials. Soliciting persons are now required to post a complete set of their proxy materials on an Internet site and furnish notice to shareholders of their electronic availability. The Internet site must be a site other than the EDGAR (Electronic Data Gathering, Analysis and Retrieval system) maintained by the SEC. The site must be publicly accessible, free of charge and maintain user confidentiality. In addition, the materials posted must be in a format convenient for printing and for reading online. Companies must provide paper or e-mail copies, as specified by the shareholder, within three business days of a shareholder’s request.

Notice to shareholders can be provided in one of two ways: the “notice-only” option, which is simply notice of electronic availability; or the “full-set delivery” option, which is a full set of paper proxy materials along with a notice of Internet availability. Under the “notice only” option, a notice must be sent at least 40 calendar days before the date that votes are counted. Under the “full-set delivery” option, notice need not be made separate and the 40-day period is not applicable, so the notice can be incorporated directly into the proxy materials.

Under both options, the notice must include certain specific information and must be filed with the SEC. The options are not mutually exclusive, so one option can be used to send notice to a particular class of shareholders, while the other option can be used to send notice to others. Intermediaries and other soliciting persons must also follow the “notice and access” model, with some exceptions. Specifically, intermediaries must tailor notice to beneficial owners, and soliciting persons other than the issuer need not solicit every shareholder. Most large public companies were required to follow the “notice and access” model for proxy materials as of Jan. 1, 2008. All others, including registered investment companies and soliciting persons other than an issuer, can voluntarily comply at any time, but must fully comply by Jan. 1, 2009.

Effective Feb. 25 of this year, the SEC adopted further amendments that encourage use of the Internet in the proxy solicitation process by facilitating the use of electronic shareholder forums. These amendments are intended to remove some of the legal ambiguity resulting from the use of electronic shareholder forums by clarifying that participation in an electronic shareholder forum is exempt from most of the proxy rules if specific conditions are met. The new rules also establish that shareholders, companies and other parties that establish, maintain or operate an electronic forum will not be liable under the federal securities laws for any statement or information provided by another person participating in the forum.

Specifically, any participant in an electronic shareholder forum is exempt from the proxy rules if the communication is made more than 60 days before the announced date of the company’s annual or special shareholder meeting, or if the meeting date was announced less than 60 days before it was scheduled to occur, within two days of the announcement, provided that the communicating party does not solicit proxy authority while relying on the exemption. Solicitations that fall outside these relevant dates continue to be subject to the proxy rules.

Further, if a solicitation was made within the relevant dates but remains electronically accessible thereafter, the solicitation could then become subject to the proxy rules. In this regard, the SEC suggests that forum operators give posting users a means of deleting their postings or having their postings “go dark” as of the applicable 60 day or two day cut off.

While the amendments exempt solicitations from the proxy rules, they do not exempt posting persons from liability for the content of their postings under traditional liability theories, including anti-fraud provisions that may require a participant to identify himself and which prohibit misstatements and omissions of material facts. Further, the amendments extend liability protection only to shareholders, companies and third parties who create, operate or maintain an electronic shareholder forum on behalf of a shareholder or company. These persons receive protection against liability for statements made or information provided by participants in the forum, so long as the forum complies with federal securities laws, relevant state law and the company’s charter and bylaws.

Karen C. McConnell is partner-in-charge of the mergers and acquisitions/private equity group; Adrienne W. Wilhoit is a partner; and Brooke T. Mickelson is an associate at Ballard Spahr Andrews & Ingersoll, www.ballardspahr.com.

Bank-issued certificates of deposit rates are inching up, but if your one-year CD is maturing, you’re probably not going to like what’s being offered. That’s because CD rates took a dramatic drop in the past year as the Federal Reserve marched through a series of reductions starting last summer. The downward spiral was triggered by a belt-tightening credit crunch and a pervasive housing downslide.

Rates plunged as much as 325 basis points in the past year, dropping to as low as 2 percent from 5.25 percent.

Early last summer, it was not uncommon to see banks offering 5 percent interest or more on certificates of deposit. Then came the steady stream of rate cuts, and CDs were paying in the neighborhood of 2 percent. Now we’re seeing rates flirting with 3 percent, and teasers that are a tempting couple of percentage points higher.

Does the move to higher ground indicate that an economic turnaround has begun? Not necessarily, say banking experts.

“Rates are down considerably from what a consumer could have gotten last summer,” says Herb Kaufman, professor of finance and vice chair of the Department of Finance at Arizona State University’s W. P. Carey School of Business. “Now they’ve come back a little bit. They’re trending up as banks try to rebuild their deposit base and retain the deposits they have.”

Kaufman and Rick Robinson, regional investment manager for Wells Fargo Wealth Management Group, agree that one of the reasons for the modest increase is the perception that the Fed is not likely to reduce interest rates anytime soon. Another factor is inflation.

Robinson says the Fed is taking a wait-and-see approach to determine how the economy responds to seven rate cuts and whether inflation will remain somewhat subdued or will increase.

Kaufman notes that inflation, fueled by gasoline and food prices, appears to be accelerating.

“As that happens — and the feds are very conscious of that — you can expect banks will have to reflect the rise in inflation with their CD rates,” Kaufman says.

A significant improvement in the credit market adds to the likelihood of CD rates continuing to drift upward through summer, Kaufman says. He expects to see CD rates somewhat higher than they were last spring.

Is the inching up of CD rates a good or bad sign for the economy?

“I’d say it’s a little bit of a good sign,” Kaufman says. “It wouldn’t happen if the Feds weren’t comfortable with the credit market. Concerns have eased. Banks are comfortable to bid up rates, which means some of the constipation in the credit market has eased.”

The rise in interest rates could be tied to various factors.

“It’s usually a signal that the economy is beginning to do well or that the Federal Reserve wants to slow down the economy,” Robinson says. “Or it could mean that interest rates go higher because of supply and demand, because of inflationary pressures.”

But Robinson cautions: “A small uptick in rates is not a signal that we’re out of the woods or that economic growth is turning around. I still think it will be subdued in the second half of 2008. We expected low growth for the first portion of this year, and we expect to pick up the pace slightly in the second half.”

Another word of caution for investors: “Some banks might offer teaser rates of 5 percent for three months,” Robinson says, “but when it matures and resets, the rate will be consistent with what other banks are offering. Any bank in Arizona must remain competitive with the bank on the opposite corner.”

The creep upward of CD rates is a good sign for aging investors who rely on income from these investments to maintain their lifestyle. Conversely, the drastic decrease in rates since last summer was hurtful, especially for seniors.

“There is less money in their pocket,” Robinson says. “As their CDs matured, if they reinvested their money they’re more likely earning less than they earned previously. They have less to live on.”

Kaufman, too, says the increase is a good sign for retirees, so long as the rise does not pose a threat to economic recovery. Because of the roller-coaster ride the stock market has been on, some investors seeking a safe haven switched to CDs covered by the FDIC.

The collapse of investment bank Bear Stearns & Co. in March spawned some movement to CDs and safer, less volatile investments, including government-backed bonds. Robinson calls it “a flight to quality.”

“In the summer of 2007, banks went through a confidence crisis,” Robinson says. “Investors were worried. Some banks experienced an outflow of deposits, given investor concerns over their viability. That concern seems to have lessened. As the crisis grows longer, more information becomes available, which lessens the panic. People can understand the viability of their institution.”

The reason for the subtle increase in CD rates is anybody’s guess.

“Some banks might be willing to take a loss on deposits to shore up their capital base,” Robinson says. “They may want to increase deposits because they see opportunities to make loans. There are myriad reasons why rates go up, fluctuating in small increments of five to 10 basis points. It could be strategic or market related.”

Here’s advice for any business giving serious consideration to selling goods and services online: Before diving into electronic commerce, make sure to get your feet wet in such critical areas as marketing, networking, branding, fulfillment and customer service.

Novices can hone these skills by selling on eBay or placing products on Amazon Marketplace. But even well-established businesses must realize that an online presence involves venturing into such new territories as the blogosphere and social media.

None of this is any reason to shy away. The upside is too great. In March, Walt Disney Co. CEO Robert Iger said his company is on track to generate $1 billion in online revenue this year. Those expectations are too lofty for most, but consider recent figures from the U.S. Census Bureau: Total e-commerce sales for 2007 reached about $136.4 billion, a 19 percent increase from the year before.

Amanda Vega is a former AOL employee who now operates Amanda Vega Consulting, an integrated marketing firm currently headquartered in Phoenix. A big part of her business is Web site development and related services. She sees e-commerce as a viable option for two kinds of entrepreneurs.

“People should consider it if they think that there’s a place in the market that isn’t being serviced by someone else or isn’t being serviced adequately,” she says. “Or (it offers) a natural extension to their brick-and-mortar store to help give them a national or international presence instead of just going the traditional route and building store No. 2 and store No. 3, which can cost a lot more than doing it online.”

The nice part about operating an effective e-commerce Web site is there are more ways to make money than just selling your own products or services. One method, according to Vega, is through affiliate deals with complementary companies.

“Even if it’s, let’s say, $300 a month that you’re making somehow behind the scenes for referring to other products or vendors, it’s still more income than the business owner had coming in through the traditional door,” she says.

Mark Sharkey, the owner of Mesa-based PrecisionPros.com Network and such related companies as DynamicPros.com, which provides Web programming services, says there are a variety of opportunities for those with content-rich sites that generate frequent repeat visits.

“If there’s a reason for people to keep coming back all the time,” Sharkey says, “then those types of sites will easily generate money from selling banner advertisements or doing a link-exchange kind of setup where they get paid based on the number of people that see an advertisement on the Web site, click through and go to another Web site.

“The great thing about an e-commerce Web site is that it can make money for you 24 hours a day,” he continues. “You don’t have to be in your office for it to make money for you. You don’t have to restrict your business to the local market. You have a worldwide market that’s available to you now.”

Deciding whether to enter the e-commerce arena won’t be your biggest decision. Deciding how to go about it the right way will be. More times than not, this means involving people like Vega or Sharkey to help with such things as research, development, design and marketing.

There are many crucial elements that contribute to a successful site, and not just from a visual standpoint.

Create a user-friendly site that enhances the customer’s shopping experience. Provide good information and make it easy to navigate. Make sure the customer feels safe when placing an order and providing personal information.

“The Internet is an open forum and if we don’t encrypt that data, it’s easy to see and steal that information,” Sharkey says. “You want to make sure the Web site itself is set up or the Web server is set up to handle secure transactions.”

There’s also the issue of real-time credit card processing. If you go this route, make sure you have a reputable company processing transactions.

You need to be on a server with a fast response time or risk losing impatient visitors. And don’t forget product availability and production times. This is not the old mail-order business. No one’s willing to wait six to eight weeks. Customers expect prompt delivery. If you promise to ship within 24 hours, Vega says, customers start counting from the time of purchase, not from the time you arrive at your office the next day.

“Those are the questions that I think people don’t think about,” she says. It may be less expensive to operate an online business than a brick-and-mortar store, “but there are extra costs associated with the fact that now your business is 24/7.”

Vega points out that if you mess up, online shoppers can quickly spread the word through blogs, forums, message boards and other social-media means.

Also, there are numerous marketing considerations, some costly and others that require hard work and smart decisions. This includes optimizing your Web site for search engines through the proper use of keywords and by generating inbound links from relevant sites. It may mean creating a blog and establishing yourself as an industry expert to help drive customers to your site. You might experiment with online advertising in some of its various forms. There’s also traditional advertising and public relations.

With football, hockey, baseball and possibly USA Basketball joining the mix, the West Valley is becoming an active sports mecca for the rest of the Valley. Recent additions to this bustling hub of game activity are new Cactus League training facilities in Glendale and Goodyear that will come online for the 2009 spring training season.

This year, the Cactus League set a record when 1.3 million fans (60 percent from out of state) attended spring training games. The Cactus League’s contribution to the state’s economy is more than $200 million a year. “Spring training is a big draw and a great experience,” says J.P. de la Montaigne, Cactus League president. “We call it our Super Bowl every year.”

Glendale’s new facility will be the spring training complex for the Los Angeles Dodgers and Chicago White Sox. The state-of-the-art baseball stadium will have seating for 13,000, four major league practice fields, eight minor league practice fields, two practice infields and 118,000 square feet of major and minor league clubhouses for the two teams. Down the road, the 151-acre site will also have residential, restaurant and retail development, a four-star hotel and an 18-hole golf course developed by Rightpath Limited Development Group.

The Arizona Sports & Tourism Authority is funding two-thirds of the complex, and the city of Glendale is contributing one-third of the $90 million project, which is under construction on 111th Avenue west of the Loop 101 between Camelback Road and Glendale Avenue. Stadium construction started in November 2007 and will be finished in time for the 2009 spring training season.

Tom Harrison, construction executive for Mortenson Sports, a division of Mortenson Construction which is building the complex, says planning the facility took longer than anticipated, so they added a night shift in August to keep construction on schedule.

“This is an exciting project and we have the right team to get it accomplished on time,” Harrison says. “I’ve been involved in five other spring training facilities in the Valley, but this is truly the most unique. The Glendale facility will be more than just a place to watch the game.”

Harrison says the Glendale stadium will have a 1,400-foot-long lake as part of the facility. The lake will have an aesthetic function as well as serve as the irrigation source for the lush landscaping that will create a park-like setting at the stadium.

“This is not going to be a standard practice area,” Harrison says. “It’s going to be an aesthetically pleasing setting with benches so fans can enjoy their surroundings.”

Based on a 2006 economic impact study conducted by Economic Research Associates for the city of Glendale, the economic impact of moving the Dodgers and White Sox to Glendale could be as much as $19 million per year for the region.

“The new spring training facility fits well in our sports and entertainment district,” says Jennifer Liewer, senior marketing and communications manager for the city of Glendale. “The Dodgers and White Sox want to make this something that will last and be part of the community, so we know that when they get to Glendale it will become their home as well.”

The Cleveland Indians and Cincinnati Reds will play at the Goodyear Ballpark, which will be located on a 3-acre parcel south of Yuma Road and east of Estrella Parkway. The ballpark will open in March 2009 for spring training for the Indians. The Cincinnati Reds will move their spring training operations to Arizona in 2010.

HOK Sport of Kansas City designed the baseball complex, which will have 8,000 lower-bowl fixed seats, 500 premium seats, 1,400 berm seats, six luxury suites, 3,000 parking spaces, and a state-of-the-art scoreboard and public address system. It will also have two group event areas: an outfield pavilion and bar with berm seating for 400 and a third-floor party deck behind home plate that will hold 150 people. Barton Marlow, a national construction services company out of Michigan, is building the ballpark complex.

The Goodyear Recreational Sports Complex, which will house the Cleveland Indians’ clubhouse/player development facility and two practice fields, is under construction on a 52-acre site east of Estrella Parkway about a half-mile south of the Goodyear Ballpark. It will be completed this month, at which time the Indians will begin using it. The Indians will use the clubhouse and two practice fields year-round. Besides the clubhouse, the Goodyear Recreational Sports Complex has six full-baseball practice fields, two half-baseball practice fields, a 36,000 square foot agility field, six covered practice batting cages and tunnels, three open practice minor league batting tunnels, six pitching mounds for the major league and six for minor league, an observation tower for the major league fields and a scoreboard.

Goodyear citizens approved a bond election in 2004 for $10 million to help build the recreational sports fields, so the city will be able to use the four minor league fields 10 months of the year. Regis Reed, Goodyear’s senior project manager, says the city plans to use the fields for city events, youth programsand high school tournaments since the fields are lighted to high school standards.

Ticket prices at the Goodyear Ballpark will be comparable to other Cactus League facilities, which are $8 for a lawn seat and up to $27 for a club or premium seat.

Nathan Torres, stadium manager for the Goodyear Recreational Sports Complex, says that based on a 2007 Cactus League survey, the economic impact of the Cleveland Indians moving to Arizona in 2009 will be more than $23 million. That number will grow to more than $47 million when the Cincinnati Reds are introduced in 2010.

“He is robbing you blind.” Business owners are never emotionally prepared to hear these five words, but they should be poised for action to protect their own interests and those of their companies’ when business relationships turn hostile.

Recently in Arizona, the owner of a residential property rental company found this out the hard way when she was told by a former employee that the manager of her company’s 150 properties was stealing from the company. A widow nearing retirement, she had made a series of business mistakes, including giving the manager stock in the company without proper legal documentation, as both a reward for past service and to motivate and compensate him for future work. The once loyal employee began to take control of the owner’s $25 million investment under the guise of “handling the details” of the business. He took control of the accounting software program, the company credit cards and kept details from the owner by misinforming her of the time for meetings with the company accountant. She was dumbstruck when she received the phone call from the former employee, but, on reflection, it all made sense. Her business acumen for finding deals on distressed properties and turning them into rentals had not prepared her for the complexities of dealing with a business divorce. As a business owner you need to protect yourself. The following provides some tips you should keep in mind if you believe a business divorce is imminent.

Gain Control When there is a shift in the business relationship, as owner your first step should be to get back your position of power. You will need to separate yourself immediately from the person causing the conflict in your business. In this case, the property owner fired the manager, changed the locks on the doors, cancelled credit cards and changed passwords to all the computer systems. You will need to take this even further to protect your intellectual property and files. Talk to your IT and file room staff about securing access and tracking of information and control of passwords.

If you are fortunate enough to have your company running well today, this is the perfect time to make sure confidentiality policies are in place and have a lawyer review your company documents. It makes more sense to manage risk and resolve conflicts before they start to touch your bottom line.

Stop Talking It is tempting to unload your frustrations on your accountant, your tax advisor, other employees and even your next door neighbor. But the truth is those comments could come back to cost you money, leverage and possibly your business reputation. While there are some exceptions, as a general rule, conversations you have with someone, other than your lawyer, can be used in court. Make your attorney your sounding board, confidant, champion and warrior. What you tell your attorney is protected by attorney-client privilege. It is the bedrock of your right to have effective counsel; without it, lawyers could not effectively represent their clients.

Keep Original Documents This property owner had a bad habit of giving away original documents. When it came time to organize her case, this made the task even more challenging for attorneys, expert witnesses and even business advisers. Making a copy of a document is fine, but make sure you keep the original. Be sure to maintain the integrity of original documents by keeping them free of extraneous handwritten notes. If you write on these documents, you may make your case more difficult. If you want to make a note about a business matter, grab a Post It note.

Hire a Lawyer You may know your business, but your expertise is in the company, not the law. A good lawyer needs to be the captain of your ship as you navigate a business divorce. Your lawyer may recommend a business adviser to get your company back on track. While this is a “divorce” of sorts, it isn’t the job for a family law attorney; you need an experienced business attorney who has dealt with breakups in the business arena. Get referrals through people you know in the business community, professional organizations or your local bar association. Do not be afraid to ask a lawyer if he/she has ever done this type of work. In some cases, a team of lawyers may be necessary. You may need experience in several different areas to get the matter resolved.

Turning the Tide How did the widowed property owner fare with her business on shaky ground and her future retirement threatened? Through a mediation process, she was able to regain control of her company and tocarve her co-owner out of the business. The woman is now back in a take-charge position, buying and managing properties. Most importantly, her future is in a more secure place.

Like a marital divorce, a business divorce is never easy but, once resolved, you’ll be able to run the company instead of letting bad employees or unsuitable business partners run you.

Leon Silver and Dan Garrison are shareholders at the law firm of Shughart Thomson & Kilroy. They lead the firm’s Business Divorce team. They can be reached at 602-650-2000.

Acquiring real estate through foreclosures is not exactly the type of transaction banks relish. That’s especially true in a down market that is overloaded with raw land and homes — and a paucity of potential buyers.

Estimates of the amount and value of acquired real estate through foreclosures are difficult, if not impossible, to come by, an industry insider says. A lot of the banks don’t want to talk about it.

“It’s ugly for everyone involved and you can’t even get the Federal Reserve to talk about it,” the insider says.

Anthony B. Sanders, professor of finance and real estate at Arizona State University’s W. P. Carey School of Business, sums up the somewhat dismal situation: “Banks are not in the business of being portfolio managers, either vacant land or housing.

“The way they’re trying to get rid of properties is that most banks are doing packaging. They sell packages of defaulted properties to investors around the United States,” he continues. “They started with national lenders, but there was very little interest in that. Then they went to regional packaging. That didn’t work either. Let’s face it, nobody really wants a Detroit-area loan or housing package.”

What’s happening is that hedge funds and equity funds are looking for very specific types of properties. Raw land value is highly dependent on where the land is.

“That’s why they don’t want to buy large portfolios,” Sanders says. “Because on the urban fringe, when you get way out west or southeast of Phoenix, some of that land they cannot literally give away. The reason is there is no foreseeable development going on in those areas.

“They’re looking for anything related to water rights or mineral rights — anything with natural resource implications still has a positive value,” Sanders says.

Until housing makes a comeback, banks are not finding a lot of interest in 40-acre tracts of desert that someday could be converted into a housing development, Sanders says. Some banks have defaulted single-family homes, often in remote areas.

“During the boom, and until fairly recently, a lot of starter homes were built in areas near Queen Creek, where land prices were fairly inexpensive for the Phoenix market,” Sanders says. “That market has really gotten beaten up pretty hard.”

National and regional bidders for those packages are few and far between.

“It brings back the old adage of location, location, location,” Sanders says. “If you’re planning properties located on major golf courses, or some properties in Scottsdale, there’s interest in that. In the classic subprime neighborhoods, which tend to be lower income, there’s not a lot of interest.”

In the meantime, banks are running around trying to peddle their packages. It’s more feasible to sell packages instead of marketing individual properties, because bank real estate portfolios are overflowing.

“Packages provide a good indication of which areas of Phoenix are likely to keep dropping like a rock,” Sanders says. “It’s those areas where there isn’t any interest in bank packages, which means the market doesn’t think they’re near the bottom. In some areas of Phoenix, the bottom may be a little ways away.”

With packaging of perhaps as many as 200 properties at a time, come discounts.

“The nasty part is that some of these properties are being offered at a big discount and they still can’t get rid of them,” Sanders says.

Even so, there continues to be interest in Ahwatukee, Scottsdale and Paradise Valley, which Sanders says means the housing market is showing some signs of life. But he adds this ominous observation.

“This is very reminiscent of the RTC (Resolution Trust Corporation) fiasco after the savings-and-loan debacle. It’s just like when the RTC was putting together packages. That’s the tipoff. Anytime you see packaging, that should make the hairs stand up on the back of your neck.”

At the Arizona Department of Financial Institutions, which regulates state-chartered banks and none of the large national ones, Tom Wood, division manager for banks, also recalls the S&L collapse.

“We had a lot of raw land in the 1980s,” he says. “Thank goodness we don’t have much of that now.”

Most of the real estate banks are trying to get rid of consists of single-family homes, Wood says.

“Very rarely do we see raw land,” he says. “Some banks don’t want to own it because it takes longer to get rid of. If they foreclose on raw land, they probably sell it at a sheriff’s sale.”

Wood expects a continued uptick in bank acquisitions of real estate, but sees very little of that among state-chartered banks. He suggests that some larger banks might be bundling foreclosed properties and attempting to dispose of their holdings through auctions or developers.

Depending on which economist you talk to, a substantial housing turnaround won’t happen until 2010. Some say 2009; and yet, as Sanders says, there are signs of life in 2008.